U.S. President Barack Obama says the two U.S. auto companies that have
received billions of dollars in emergency loans have not made enough
changes to justify continued government assistance.
He asked the head of General Motors to resign, and gave the company 60 days to come up with a better plan.
The president said the third largest U.S. automaker, Chrysler, is even
weaker, and cannot survive without forming a corporate partnership. The
president gave Chrysler 30 days to work out such a deal with Fiat.
Shortly after the president spoke, Chrysler officials said they had reached the "framework" of an agreement with Fiat.
Mr. Obama also raised the possibility that the U.S. car companies could
go through a form of bankruptcy that would allow them to shed some of
their debts, reorganize and get back into business.
General Motors says former CEO Rick Wagoner will be replaced by Fritz
Henderson, GM's president and chief operating officer. GM officials
also say they will replace most of the company's board of directors.
Governor Jennifer Granholm of Michigan, the midwestern state where the U.S. auto industry is based, said (on NBC's "Today Show" that) Wagoner was GM's "sacrificial lamb," and that he agreed to step aside for the good of the company and its workers.
GM and Chrysler have already received more than $17 billion in
government loans and have asked for another $21 billion. The third
major American manufacturer, Ford, has not asked for government help.
Separately, France's biggest automaker ousted its chief executive Sunday.
Peugeot fired Christian Streiff and said he will be replaced in June by
Phillipe Varin, currently the chief executive of steelmaker Corus.
Peugeot lost more than $450 million last year.